The price of a billet from Tangshan reached a 9-year peak due to a reduction in production

Tangshan Q235 150mm square billet price, which is an indicator of Chinese steel market sentiment, especially in North China, soared to its more than nine-year high of 4140 yuan /t ($ 641 /t) EXW, including 13% VAT , by February 19 or higher. Just 290 RMB /t since February 2, the last day Mysteel updated prices ahead of the Chinese New Year (CNY) holiday of February 11-17.

Tangshan in Hebei province in northern China is the center of China’s billet manufacturing and trade, and the jump in local billet prices was driven not only by high production costs and market optimism, but also by the latest restrictions imposed by the city on the afternoon of February 18 local steel mills due to poor air quality.

To ensure that the order is being followed, the City has indicated in the notice the sinter plants at each of the steel mills that need to be stopped or restricted, explaining that further notice will be given as to when the restriction will be lifted.

A representative from the Tangshan Steel Works confirmed the impact of the latest restrictive measures.

“Our agglomerated ore reserves were depleted, steel production declined and we had to shut down one of our four rolling lines,” he said.

However, concerns about a decrease in the supply of billets due to the latter restriction, however, pushed local transshipment companies to place more orders, eliminating their earlier concerns about a possible disruption to production, ”he added.

Such restrictions for steel mills and other local polluting industries such as cement production have been fairly common in Tangshan when poor air quality is predicted but low billet stocks at many local rewinding machines and low finished steel stocks at end users. increased anxiety and the urge for more orders, a local market analyst analyzed.

“End-users and traders did not have large stocks (steel) until 2021 CNY as they were not sure if they would be able to resume work in time after the holiday, so now they need to rush,” he said.

Since early 2021, new cases of COVID-19 have been reported in many Chinese provinces, including first Hebei in northern China and then Jilin and Heilongjiang in northeastern China, and the situation has been so alarming that Beijing has strongly advised Chinese not to travel. return to their hometowns for CNY, but to celebrate where they work and live to prevent a new wave of COVID-19 outbreak.

The travel restrictions around the country had an effect, and by February 19, China had not reported a single new case of the disease domestically for the fifth day in a row, according to a report from China’s National Health Commission.

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